New policy to regulate cement industry
The Ministry of Trade and Industry (MoTI), is in the process of developing a policy document to regulate activities in the cement industry.
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A memo is currently before cabinet awaiting approval for the development of a policy instrument to regulate the local cement industry in the long term.
Addressing a forum in Accra, the Head of Tariff Advisory Board at the Ministry of Trade and Industry, Mr Lawrence Osei-Boateng said plans were far advanced for the preparation of the policy document to regulate the cement industry in the country.
The ministry, as an interim measure, in March this year directed all cement importers to register with the ministry. This is to regulate the imports of cement.
Though such policies are often formulated to protect local industry, it sometimes provide avenue for desperate importers to bribe their way through the system.
Recent data on cement imports indicates that there is a sudden, significant, and sharp increase in imports of cement into Ghana.
That, Mr Osei-Boateng, said had led to material and serious injury to the local cement industry.
“The astronomical increase and upsurge in importation of bagged cement into the country is quite injurious to the local cement industry and if not curtailed, will impair the growth and opportunities in that sector” he indicated.
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Upsurge in importation
The upsurge in importation of bagged cement into the country is quite injurious to the local cement industry and if not curtailed, will impair the growth and opportunities in that sector.
The adverse effects of the large-scale importation of bagged cement include low capital investment, massive loss of jobs, less use of local raw materials, reduction in financial contribution to the economy in terms of direct and indirect taxes.
These and other unfair trade practices when allowed or encouraged would lead to unemployment with dire consequences on other socio-economic activities.
Local industries that suffer as a result of unfair trade practices are usually given some respite through some trade measures.
Under international trade and the World Trade Organisation (WTO) rules, countries are afforded the opportunity to apply trade contingency measures, namely Anti-Dumping, Countervailing as well as Safeguard Measures to address such difficulties faced by domestic industries.
Contribution of the industry
Cement production in Ghana started as far back as 1967 when Ghana Cement Works, now GHACEM Limited, was set up by the Government of Ghana in collaboration with Norcem now Scancem International of Norway.
Local Cement companies namely GHACEM, Diamond Cement, Savanna Diamond Cement, Western Diamond Cement, Dangote Cement (terminal) have an installed capacity of the local cement industry including about 8.5 million metric tonnes per annum as against an annual peak demand of about 6 million metric tonnes.
There is, therefore, a surplus of 2.5 million metric tonnes per annum. Expected companies are Dzata, CIMAF, Dangote in the Western Region with a combined production of 3 million metric tonnes.
The industry employs direct and indirectly about 5800 workers and the figure is projected to increase in the coming years. The sector also contributes immensely to revenue generation with respect to the payment of direct and indirect taxes.
For instance, the Cement Manufacturers Association of Ghana (CMAG) contributes over GH¢ 600 million annually in terms of duties and taxes to the state and demonstrates its commitment towards corporate social responsibility by supporting infrastructural development in the country.
The government in recent years has encouraged Ghanaians to patronise ‘Made-in-Ghana Goods’, including encouraging manufacturers to embrace the local content policy and value-addition, as part of government’s transformative and industrialisation agenda in various sectors of the economy.